Correlation Between UBS and IShares Bloomberg

Can any of the company-specific risk be diversified away by investing in both UBS and IShares Bloomberg at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UBS and IShares Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UBS and iShares Bloomberg Roll, you can compare the effects of market volatilities on UBS and IShares Bloomberg and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UBS with a short position of IShares Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS and IShares Bloomberg.

Diversification Opportunities for UBS and IShares Bloomberg

-0.34

Correlation Coefficient

UBS  IShares Bloomberg

Very good diversification

The 3 months correlation between UBS and IShares is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding UBS and iShares Bloomberg Roll in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Bloomberg Roll and UBS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UBS are associated (or correlated) with IShares Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Bloomberg Roll has no effect on the direction of UBS i.e., UBS and IShares Bloomberg go up and down completely randomly.

Pair Corralation between UBS and IShares Bloomberg

If you would invest  4,821  in iShares Bloomberg Roll on September 14, 2024 and sell it today you would earn a total of  107.79  from holding iShares Bloomberg Roll or generate 2.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	3.13%
Values	Daily Returns

UBS  vs.  iShares Bloomberg Roll

UBS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, UBS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares Bloomberg Roll

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Bloomberg Roll are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, IShares Bloomberg is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UBS and IShares Bloomberg

The main advantage of trading using opposite UBS and IShares Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS position performs unexpectedly, IShares Bloomberg can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares Bloomberg will offset losses from the drop in IShares Bloomberg's long position.

The idea behind UBS and iShares Bloomberg Roll pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.